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October 17, 2007

Organizing Paper - The issue of how to categorize paper

In this series on organizing paper, we’ll explore deeper paper organizing issues and ways you can overcome your personal issues with paper.

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One of the most frustrating obstacles to organizing paper I hear often from clients and friends is that just about every piece of paper we have could fit into several possible categories. For example, many people get stressed trying to decide. I often get asked questions such as “should I file my car insurance with my car file, my bills, or group all my insurances together?”

My response is usually something like, "it doesn’t really matter as long you make a choice, have a way to remember what you chose, and can find the paper when you need it."

There are many strategies for categorizing your paper. Some of the possible categorizing methods you might use include:

When choosing what categorizing methods to use the important thing is to keep it simple and easy to maintain. It has to feel natural to you. Some people naturally think chronologically, others are great at remembering names and need to file that way. Others tend to forget names and need a category clue such as VENDORS to help them narrow down the choice of vendor files to review and find the vendor they are thinking of.

Effectively implementing a category based system requires you to use it consistently and remember what categories you chose. If you are tired, or don’t have a system in place to help you make filing decisions easily, you are more likely to suffer from what I call “decision stress” and give up on choosing a category. The paper then ends up in a pile such as “to be filed” or worse, wherever you happen to lay it down. Then when you need it, you can’t find it.

To minimize “category decision stress” here are a few things you can do.

Design your category structure ahead of time to avoid the need for on-the-spot decision making when paper comes in. Make notes about where you decided to file things so you can refer back to it. This is not a job to be done when you are tired or rushed.

Keep it SIMPLE. As you are making your category decisions, try to have no more than 4-6 major categories. If you have more than 3 files under a subject, create sub-categories. For example, suppose one of your major categories is financial. Under that you have 6 types of investments. Make investments a subcategory so you can group them and alphabetize them. Start each label with Investment then company or type. E.g. Investment, Vanguard or Investment - Savings Bonds.

Create a file “map” or “blueprint”. Keep it handy to refer to when you can’t remember what category you decided to keep certain types of paper in, or when you need to show someone else how to file paper for you. It should be intuitive and easy to read. Include reminders of why you made certain category decisions. I also find it helps to put notes within a file folder to help you remember what goes in the file and what doesn’t.

Software solutions such as “Paper Tiger” and scanning solutions such as the Fujitsu ScanSnap and NeatReceipts are among the most popular. But be warned, they only work if you establish a complete system and develop the habit of scanning all your paper into your computer.

Digital “search” software such as X1 Desktop Search, and Copernic Desktop Search, Google Desktop Search are very quick and simple methods of finding documents on your computer when you need them. They allow you to search using ANY word or phrase in the title or text of the document. If only we could do that with physical paper! So even if you scan all your paper into one folder, if you name them descriptively, you can always use the search tool to find them easily.

The speed, ease of use and capabilities of the latest digital scanning and searching technologies are increasing rapidly. Prices are falling just as quickly. Now that the IRS accepts digital copies of tax documentation (if it is scanned using certified tamper proof scanning methods), it won’t be long before digital paper organizing becomes mainstream. It saves time, money, space and makes it easier to find paper when you need. But remember, as with any digital solution, it only works if you back up regularly and use it!

THINK ABOUT THE FULL LIFECYCLE OR YOUR PAPER AND DOCUMENTS

Consider the full lifecycle of your paper - whether you scan it or not. To make your system easy to maintain, decide what you will do with documents from the time they enters your life till the time they must leave. e.g., I'll keep credit card bills for one year then shred or delete, or I'll move my bank statements to an archive filing system after one year, keep for 10 years, then shred or delete.

Include a reminder strategy for implementing your schedule for eliminating documents. e.g., Every December as part of preparing for the new year, I will move everything to archives according my rules, and shred or delete the rest. Then as I move things into archives, I will also purge the archives of old stuff. You could also set up an electronic reminder.

Backup and Security - if you store documents digitally, you MUST have a foolproof back up strategy. For example you can use a RAID system that instantly saves everything you do to 2 drives. My newest Dell Precision has RAID built in and I love it. No more having to remember to do backups. It's all done automatically and is always 100% up-to-date. Of course if your documents are extremely important or irreplaceable, I do also recommend using an offsite backup method such as a DVD or CD in a bank security deposit box or an online backup system such as the Geek Squad Online Data Backup Service.

If none of these approaches appeal to you, you might try an off-the-shelf filing system. These work well for people who are willing to take the time to read the instructions, and put the materials together. You also must be willing to adapt yourself to the structure put in place by the designer. They can save some time, but often, they also require modification to address all your needs. There is also often a lot of wasted product associated with pre-printed systems because you don't need all the parts.

If you've tried these approaches, and they haven't worked for you are not alone. Consider consulting an organizing professional who can assess your needs and help you design a custom document and paper organizing system you will actually enjoy using. A good organizer will help you design a system of categories that is right for your needs and style and that will be easy for you to maintain.

If you would like to reprint this article on your blog or other publication please email or call for permission and send me a link to how it appears. Also be sure to include my bio as shown below. Thanks!